Memorandum-Of-Agreement-Form.Doc. Determinants Of Use In: Fill & Download for Free

Yes. After learning hard lessons about the tension between investors and founders, I teamed up with my former business partner, Dan Flanegan, and my attorney, K. Adam Bloom, to create an open-source standard that you can attach to any bylaw agreement, term sheet, employment agreement, etc.It’s called the Founder Friendly Standard. It has 17 sections that can lay common disputes to rest such as who gets to vote, who gets liquidation preferences, what is the scope of non-compete, etc.Here are (3) three of the juiciest sections:1.1 Individuals who work for the company and are instrumental in its inception (“Founders”) receive a class of equity such as Common Stock which provides no less than twenty-four (24) votes to one (1) vote of stock held by investors or employees.If you’re the founder, why not control your own company? This can lead to better business performance for investors according to Credit Suisse’s Family 1000 research[1].2.1 Founders agree in writing they will give and receive performance reviews at the end of each fiscal quarter for the first four (4) years.Have you ever seen conflict fester and erupt? Famous examples include Bill Gates & Paul Allen, Evan Spiegel & Bobby Murphy, and Mark Zuckerberg & Eduardo Saverin. This provision facilitates giving and receiving feedback at least every quarter to address conflict before it becomes a risk to your startup.3.2 For at least the first two (2) years of operations, the company does not agree to binding arbitration with any investor.It’s a known fact that forced arbitration between parties of unequal bargaining power[2] is unfair. And since arbitration is often more expensive than regular court, wouldn’t it be in the investor’s best interest to go along here to save costs?The full text of Founder Friendly Standard is available here. I encourage you to read it and send it to your attorney for your next conversation. See the “Quick Links” menu at the top of the standard. If you are papering a deal, your attorney can download and customize our free template term sheet. If an investor sent you paperwork, your attorney can compare it to the Founder Friendly Standard with our free attorney review form. You can download these resources without even providing your email address.Our attorney review form helps you organize analysis of the legal issues that can determine whether you run your startup or take orders from investors. We used the same review form as a starting point for the below infographic which compares popular term sheets to Founder Friendly Standard.Founder Friendly Standard v. other term sheets [Infographic]Click for an interactive infographic comparison of Founder Friendly Standard to term sheet templates like the Y Combinator Safe, 500 Startups KISS, NVCA Model Legal Docs, etc. In the interactive version, you can click on individual bars to reveal attorney commentary about each issue.What’s in it for investors?Healthy financial returns. I’ve researched how the Founder Friendly Standard combined with optionality can deliver better returns than today’s angel investing and venture capital methods. The book is called: Grays Sports Almanac for Venture Capital: A new standard for optionality to beat the odds.Footnotes[1] https://www.credit-suisse.com/media/assets/corporate/docs/publications/research-institute/the-cs-family-1000-in-2018-en.pdf[2] unequal+bargaining+power+arbitration+unfair - Google Search

Q. How much did the Israeli military influence the Vietnamese military modernization?Vietnam, an Emerging Partner in Israel’s ‘Asia Pivot’ PolicyThe Vietnam Chamber of Commerce and Industry and the Economic and Trade Department of the Israeli Embassy at Vietnam-Israel business forum in Hanoi, image by Mark Neyman, Israel GPOBESA Center Perspectives Paper No. 468, May 17, 2017EXECUTIVE SUMMARY: Israel is increasingly looking for partnerships in economic, political, cultural, and military sectors with countries in Southeast Asia, and relations with Vietnam, in particular, are on the upswing. While cooperation between Israel and Vietnam is largely focused on civilian sectors, defense ties are also growing more robust, with Israel getting involved in upgrading aging Vietnamese weapons systems and collaborating on weapons development. There is a visible bonhomie between the nations, and Israel-Vietnam ties are likely to deepen.Vietnam’s relationship with Israel has been getting steadily stronger over the past few years. In what could be considered an extended, modern-day “peripheral doctrine”, Israel is doing all it can to enhance cooperation with the Asian countries. This can be seen with regard to China, India, Singapore, Thailand, the Philippines, Myanmar, South Korea, and Japan. Thriving economic and military-security cooperation has become the hallmark of its relations with these countries (though in some cases, political relations have yet to be strengthened).Israel and Vietnam are carefully crafting a potential partnership based on their respective national interests – economic, military, and political.Contemporary Israel’s Vietnam policy resembles the overtures it made during the 1950s and early 1960s towards the Sub-Saharan countries, with which it shared technical expertise in agriculture and healthcare. With the aim of forging friendly, supportive relations, Israel focused on multifaceted initiatives in Africa, including technical assistance, training programs, joint-economic enterprises, trade, and so on. Military cooperation and arms trading were also important elements of Israel’s relations with African countries, including Uganda, Kenya, Ethiopia, Zaire, and Ghana.A similar trend is now being followed with Vietnam. Israeli-Vietnamese relations are expanding in the fields of agriculture, commerce, science, and technology, and – most importantly – in the defense sphere.Israel and Vietnam established diplomatic relations in July 1993, and their economic relationship is relatively healthy. Bilateral trade volume touched US$1.3 billion last year, and the countries aspire to take it to an annual US$2 billion. In 2004, the countries signed the Agreement of Economic and Trade Cooperation for further development of trade. Israel imports cellular phones, electronic components, seafood, coffee, textiles, and footwear from Vietnam, and exports machinery and equipment, hi-tech goods, and fertilizer.In the first quarter of 2017, Israel had 25 foreign direct investment (FDI) projects in Vietnam worth over US$46 million. In December 2015, during a visit by Vietnamese Deputy Prime Minister Hoang Trung Hai to Israel, formal discussions were launched on a Free Trade Agreement (FTA). This raised the prospects for further growth in the investment, finance, services, science and technology, and labor sectors. Cooperation in the health sector is also expanding: the two countries have signed an agreement in which Israel has agreed to assist Vietnam in the construction of a 300-bed hospital with some of its latest technology and equipment.Israel’s agricultural involvement with Vietnam – an area in which Israel has deep expertise over many decades – is significantly on the rise. To augment cooperation, Israel’s Agency for International Development Cooperation, Ministry of Foreign Affairs (MASHAV), and embassy in Hanoi have implemented a training program in the country for Vietnamese citizens. In December 2013, Israel’s Agriculture Minister Yair Shamir and Vietnamese officials agreed to establish a joint Research and Development (R&D) program in agriculture to expand businesses in this area. Some of the areas in which Israeli companies can offer assistance to Vietnam are breeding, preservation technology, water use, and models for scientific research.Remarkable progress can already be seen, and Israel has become an important partner for Vietnam’s dairy industries – so much so that it has become an essential component of Vietnam’s “dairy diplomacy”. Israel-developed agricultural technology is now widely used in almost every province in Vietnam.Simultaneously, there is steady growth in openly acknowledged military-security relations between the countries. In addition to trading arms, Israel and Vietnam are engaged in joint ventures in the production of weapons systems suitable to the needs of the Vietnamese armed forces. Israel’s entry into this defense market is timely, as Hanoi is undergoing modernization programs for all three military services. It is increasing defense expenditures, which touched nearly US$4.6 billion in 2015 and are expected to reach US$6.2 billion by 2020. These steps have likely been taken by the Vietnamese government in response to the Chinese military build-up in the South China Sea.Israel has carved a niche in the global arms market by developing and manufacturing some of the most technologically advanced systems for maritime security, air defense, electronic warfare systems, reconnaissance drones, arms and ammunition, short/long-range missiles, and avionics and other subparts. These systems are reasonably priced, and the securing of deals to acquire them is relatively easy as they tend to come with fewer strings attached.Vietnam’s large army is equipped with aging weapons systems, and Israel has the potential to upgrade some of them. Elbit Systems is reported to have secured an upgrading contract for Vietnam’s Mil Mi-17 helicopters. In 2011-12, Israel Weapon Industries established a production facility (at a cost of $100 million) in Vietnam to help supply Galil ACE 31 and 32 assault rifles to the Vietnam People’s Army (VPA). In 2014, the countries worked towards signing agreements to establish a “formal framework” to upgrade their bilateral defense relations, including promotion of future technology transfer and industrial cooperation. In 2015, Israel set up a defense attaché in Vietnam.The frequency of visits by military officials, which has become an annual phenomenon, is another manifestation of the keenness on both sides to intensify defense ties. In January 2017, General Pham Ngoc Minh, Deputy Chief of Staff of the VPA, met Mishel Ben-Baruch, Director of the Israeli Ministry of Defense’s International Defense Cooperation Division (SIBAT), to explore ways to expand military cooperation to include training, education programs, and exchanges. Following a meeting in Hanoi in late February between Vietnamese President Tran Dai Quang and Israel Military Industries (IMI) chairman Yitzhak Aharonovitch, Vietnam began to consider purchasing Israeli-made Delilah standoff-range air-to-surface missiles (including, for example, the Orbiter-2 Unmanned Aerial System [UAS], manufactured by Aeronautics). Vietnam has also fortified some of the islands in the disputed South China Sea with the EXTRA rocket system acquired from Israel.Between 2010 and 2016, Vietnam imported Spyder, Derby, and Python-5 missiles and ELM2288/ ER and ELM2022 air defense radars from Israel. More trade in such items can be expected, as the lethal arms embargo against Vietnam was lifted by then US president Barack Obama in May 2016. At this stage, immediate competition from other international arms vendors is unlikely, as Israel’s share in Vietnam’s imports is relatively low. Russia, for instance, is accountable for 80% of Hanoi’s recent military purchases. However, this possibility cannot be ruled out, as a Moscow-based military expert has already questioned the capability of Israel-made missiles.Arms exports remain an important instrument of Israel’s foreign policy for both politico-diplomatic and economic reasons. The perpetual nature of the security challenges emanating from its hostile neighbors, and their unrelenting attempts to isolate and castigate Israel politically from the standpoint of regional and international groupings, continue to motivate Israel’s arms sales diplomacy. Israel’s economic and technological assistance and arms transfers to Vietnam can be understood as emanating from this strategy.While Israel’s arms diplomacy helps it to build political relationships, the funds generated by arms exports sustain its R&D programs in military technology, which it needs to maintain its edge over its regional adversaries. This applies to almost all its relations with Southeast Asian countries. Given that the Asia-Pacific countries contributed US$2.6 billion to the Israeli arms business in 2016 out of a total global export of US$6.5 billion, Israel will certainly continue to encourage defense cooperation with Vietnam and other nations as a means of diversifying its revenue sources.The state visit of Israeli President Reuven Rivlin to Vietnam in late March 2017 added further impetus to the already flourishing ties. He pushed not only for the existing cooperation to continue but also for Vietnam’s political support, especially in multilateral fora such as the UN. If good relations are to last, this element – in addition to economic and military cooperation – will be very necessary.That said, an atmosphere was created by the Rivlin visit, and more avenues for cooperation have opened in all the sectors. It is now up to the two countries to determine how they can most effectively take advantage of the plethora of opportunities they can offer one other. Prime Minister Benjamin Netanyahu’s “pivoting to Asia” policy is taking shape, and Vietnam is emerging as a crucial partner.Alvite Ningthoujam is a Senior Research Associate at the New Delhi-based think tank Vivekananda International Foundation, where he focuses on Middle Eastern security dynamics, international terrorism, and ISIS. His other research areas include Israel’s arms exports, Indo-Israeli relations, and Israeli-Southeast Asian ties.Vietnam Eyes Israel's Delilah Standoff Missile And F-16s Could Be NextKGYST/WIKICOMMONSChina's militarization of its man-made islands in the South China Sea and the resulting anti-access/area-denial bubbles that will cover massive swaths of that body of water in the not-so-distant future has Vietnam shopping for weaponry that can counter Beijing's grand plans. Hanoi has already forward-deployed Israeli-built GPS-guided Extra multiple launch rocket systems to their own islands in the South China Sea—a weapon system that could rain down rockets on China's outposts with little warning. Now, Vietnam is looking towards Israel once again for its weapons needs, this time to provide a standoff multi-role cruise missile that can strike targets over 150 miles away with pinpoint accuracy.US LIFTS BAN ON ARMS SALES TO VIETNAM AMID TURMOIL IN THE SOUTH CHINA SEAISRAEL RETIRES THE F-16A/B “NETZ” AND PUTS 40 UP FOR SALEAccording to Flightglobal.com, Israel's Delilah missile system was a topic of discussion between Vietnam's President Tran Dai Quang and Israel Military Industries chairman Yitzhak Aharonovitch while he was visiting Hanoi.Israel Military Industries Delilah air-launched cruise missile has evolved over the last decade to become a reliable, highly flexible and extremely accurate standoff weapon. Delilah is quite compact when it comes to cruise missiles, weighing in at just over 400 pounds. It can pack different warheads in the 50 to 75-pound weight class and flies to its target at subsonic speeds and at various altitudes. The missile evolved from an air-launched decoy design, having roots going back decades, but its first known operational use was in 2006 against targets in Lebanon. Since then it has been a front-line weapon of choice for the IAF and it would have been heavily used in an Israeli offensive against Iranian nuclear and air defense sites if that operation were to have been launched.IAFDelilah uses inertial navigation with embedded GPS coupled to an autopilot for down-range navigation, and then it can switch to imaging infrared or CCD imaging for terminal guidance. It does this via data link allowing for man-in-the-loop control of the missile for final targeting. What this means is that a weapon system officer in the back of a fighter jet 150 miles away can make fine-tuned adjustments on the missile's point of impact, giving the missile an extreme level of accuracy.For instance, instead of hitting a designated building, a controller can have Delilah fly through an air duct or window on that building. It can also hit moving vehicles and can be used as an anti-ship missile. Israel has long chosen a man-in-the-loop control option for some of their most capable air-to-ground missiles. The much larger AGM-142 Have Nap/Popeye missile, and even the much smaller anti-armor Spike/Tammuz missile use similar control concepts.Delilah can also loiter over a target area, throttling back its turbojet engine to conserve fuel and be retargeted on the fly. It can even be told to "go around" if the target cannot be identified clearly by the operator. Although it is a key feature of the missile's design, this man-in-the-loop control concept is not absolutely necessary. The weapon can also attack fixed targets autonomously using GPS/INS guidance alone. Delilah can also be configured for the suppression/destruction of enemy air defenses role where it loiters over an area for a period of time. Once it detects an enemy radar emitter it homes in on that target and destroys it.Although Delilah is best known as a fighter-launched medium range multi-role missile, because of its small size and relatively lightweight it can also be carried by helicopters and can even be deployed via ground launchers.IMI has been working on more advanced versions of the Delilah for export purposes, ones that could feature more range and warhead choices, and are capable of avoiding or attacking air defenses autonomously. Additionally, automatic target recognition and scene mapping capabilities could take the place of man-in-the-loop targeting for certain missions. Similar abilities are being integrated into the latest Tomahawk cruise missiles as well as Lockheed's promising and very stealthy Long-Range Anti-Ship Missile (LRASM), among others.So what you have here is a single missile that can accomplish what a series of discreet missiles types would be traditionally needed to do so. Which along with its range and size make it perfect for a country that needs a diverse set of standoff missile capabilities but is on a tight budget. As an air-launched system, a Vietnamese fixed-wing aircraft would have to fly just 150 miles from Vietnamese mainland before launching a Delilah missile at a target on China's sprawling Fiery Cross Reef island outpost. A Delilah missile could reach China's strategic Hainan Island without needing an aircraft delivery system at all, instead, it could be shore-launched. As such, you can see how the system is uniquely suited for Vietnam's regional needs, and the fact that it can attack ships too makes it all that more attractive.IAFThere is the issue of what Vietnamese aircraft would put such a missile to use. Their Su-30MK2 Flankers could possibly be adapted to employ the missile, and it would not be the first time Israeli avionics found their way into to Russia's iconic heavy-fighter design. Vietnam's Russian-built helicopters could also be adapted to sport the missile, but it would not be ideal. Beyond their existing fighter platforms, Vietnam may also opt to procure western fighter aircraft, and there are rumblings that this could be underway as part of a larger initiative to turn away from Hanoi's traditional sources of weaponry.Israel may have just the jets to sell them with their new missiles—40 surplus F-16A/Bs "Netz" fighters that are currently up for sale. Israel Aerospace Industries could refurbish these jets indigenously with advanced multi-mode radars, electronic warfare suites, and new cockpit avionics. Additionally, IAI can also apply structural upgrades to the used jets to give them thousands of hours of additional service life. Doing so would give Vietnam a uniquely capable and supportable western fighter aircraft that is tailored to employ the Delilah missile, along with other Israeli-built air-ground and air-to-air munitions—and they would not have to deal with the Washington bureaucracy to obtain them.IAIIf Vietnam were to execute such a strategy, China would not be happy. But considering the changing geopolitical and military realities in Southeast Asia, Vietnam has to do something to further bolster its offensive capabilities. Seeing that a unique Israeli weapon system is already being by Vietnam used to counter-balance China's military expansion in the region, it makes sense that Hanoi would go to the same source to continue doing so, especially if that source can provide big capabilities at a relatively low price. Not just that, but with Vietnam spending increasing defense dollars with Israel for other air combat needs, including ordering high-end SPYDER air defense systems, getting a fighter aircraft that can interoperate intimately with these systems is only logical.One thing is for certain—fielding a couple squadrons of highly upgraded F-16s armed with Delilah missiles would give Vietnam a considerable boost in power projection capabilities, and would be a worthwhile step in countering China's military expansion into the South China Sea.Contact the author: [email protected] tour is proof Israel, Vietnam are brothers in armsIsraeli President Reuven Rivlin’s tour of Vietnam indicates ties between both countries are improving, especially in the area of defense area. The state visit, which ends today, is just the second to Vietnam by an Israeli head of state.In November 2011, former President Shimon Peres became the first Israeli leader to visit Vietnam. The bilateral relationship has progressed rapidly since then, with both nations exchanging high-level visits and extending cooperation across many fields, including trade.According to Vietnamese statistics, the two-way trade between was US$1.3 billion last year, rising from US$68 million in 2005. Trade will increase rapidly in the next few years, with both countries committed to striking a free-trade agreement.The core of the relationship is, and continues to be, cooperation in defense. In March 2015, Vietnam’s Deputy Minister of Defense Nguyen Chi Vinh and Israel’s Director General of the Ministry of Defense, Dan Harel, signed a memorandum of understanding on defense cooperation, that strengthened cooperation in areas such defense sales and technology transfer.Earlier this year, Pham Ngoc Minh, the Deputy Chief of the General Staff of the Vietnamese People’s Army (VPA), received Mishel Ben-Baruch, the Director of the International Defense Cooperation Directorate of Israel’s Ministry of Defense. The meeting ended with a resolution to improve bilateral defense cooperation.One month later, Yitzhak Aharonovitch, chairman of Israel Military Industries Ltd (IMM), a state-owned weapons developer and manufacturer, was in Hanoi.In hosting Aharonovitch, who already visited Vietnam in February 2014 in his role as Minister of Public Security, Vietnam’s President Tran Dai Quang said bilateral cooperation, especially in defense, “has consistently advanced.” Quang, who toured Israel in November last year in his former role as Minister of Public Security, said Israel “has become a big partner of Vietnam in the defense field.”Lieutenant General Nguyen Chi Vinh, said he hoped that Aharonovitch and his company would continue contributing to advancing cooperation on defense.That Vietnam’s president and a high-ranking VPA official received the head of one of Israel’s leading arms companies indicates Hanoi’s desire to enhance its defense ties with Israel and upgrade its defense capabilities.In an IMI statement, Aharonovitch said he hoped “both countries will work on streamlining the mutual collaboration and high technology knowledge transfer.” He stressed that the “advanced weapons systems developed and manufactured by IMI Systems correspond to the advanced technology used by the Vietnam army.”While the main purpose of President Rivlin’s week-long visit is to foster cooperation in fields such as agriculture, education, health and trade, defense cooperation remains top of the agenda.Like his predecessor six years ago, the 77-year old traveled to Hanoi accompanied by a big defense industries delegation, which reportedly includes MMI Systems, Elbit Systems, Israel Aerospace Industries and Rafael Advanced Defense Systems. Elbit, Israel Aerospace and Rafael are ranked 29, 32 and 43 in the 2016 Stockholm International Peace Research Institute index of the world’s top 100 arms-producing and military service companies.On Monday, Vietnam’s Defense Minister General Ngo Xuan Lich received the leaders of the Israeli defense businesses. A day later, the first Vietnam-Israel defense industry forum was held in Hanoi. Lich, Rivlin and many other officials from both sides attended.Also on Tuesday, Lich, a Politburo member, met with Rivlin and both toured an exhibit of Israeli defense equipment. During the tour, several Israeli companies, whose products were displayed, presented them with developments and advancements in unmanned planes and drones, sophisticated tanks, rocket launchers, and others.While acknowledging that much has been achieved, both the host and the guest underlined the demand for and potential of ongoing, significant deals in defense.According to his spokesperson, Rivlin said to Lich as “you and I were raised in countries which were battlefields, we all know that quiet, security, and peace cannot be taken for granted. The military and security forces have a role, not just in times of war, but also in times of peace.”The message would have been well received not only because of Vietnam’s battles against foreign aggression but also for the country’s need to strengthen the military to safeguard sovereignty and territory.China’s expansive territorial claims and its military build-up in the disputed waters of the South China Sea are now Vietnam’s biggest concern. They are also the key reason why Hanoi is seeking closer defense ties with countries that have advanced military technologies and know-how, such as Israel.Russia and Eastern European states have been Vietnam’s main arms suppliers. That has changed in the past decade with the purchase of Western-made arms. It has, for example, ordered Israel’s surface-to-air Python and Derby (Spyder) missiles. Vietnam has increased its military spending and turned to Israel not only because it is one of the world’s top exporters of military equipment but also because the Middle East military power is willing to share its expertise.In his talks with Vietnam’s Defense Minister, the Israeli President said his country was “a pioneer in that it recognizes the need to establish advance production lines with Israeli know-how in Vietnam, and to produce with Vietnam and in Vietnam.” Lich expressed Vietnam’s appreciation for Israel’s “extensive and excellent cooperation in the field of defense”.That Vietnam places the greatest importance in Rivlin’s visit was evident earlier this week when he was greeted by the president, prime minister and Communist Party secretary general, the three most powerful positions in Vietnam.VIETNAM ISRAEL TRADE DIPLOMACYXuan Loc DoanXuan Loc Doan is a UK-based researcher. He holds a PhD in International Relations and researches and writes on a number of areas. These include Vietnam’s domestic and foreign policy, ASEAN, EU, UK’s politics and international politics in the Asia-Pacific region.Vietnam-Israel Military Ties in the Spotlight with Bilateral Meeting (diplomat.com)Image Credit: Wikimedia CommonsLast week, an Israeli defense delegation paid a visit to Vietnam as part of an ongoing effort to explore further opportunities in the defense realm. The interaction spotlighted the growing defense relationship between the two sides that often remains under the radar relative to some of Hanoi’s other defense partnerships.Though Vietnam and Israel established bilateral ties back in 1993, over the past few years, that has grown to include defense cooperation as well. A series of steps have been taken by both sides, at times quietly, with Israel opening a defense attaché office in Vietnam in 2014, the inking of a memorandum of understanding on defense cooperation in 2015, Vietnam’s purchase of Israeli weapons systems, and both sides exploring other areas of cooperation such as technology transfer and defense industry through meetings, fora, symposia, and other interactions. Last year’s visit by Israeli President Reuven Rivlin, just the second to Vietnam by an Israeli head of state, touched on defense issues as well.2018 was expected to be an active year for bilateral ties, including the defense realm. Apart from the convergence of interests and continuity in ties, the fact that both countries were commemorating the 25th anniversary of their establishment of diplomatic ties and Israel was commemorating the 70th anniversary of the establishment of the state of Israel meant that we were likely to see some developments tied to these occasions. Indeed, the newly appointed Israeli ambassador to Vietnam has been highlighting the quest to boost bilateral ties this year, including in the defense realm.Tavor TAR-21 Fielded By Vietnam Special Forces - The Firearm BlogIWI To Produce Weapons In Vietnam - The Firearm BlogBáo Người đưa tin 24h - Đọc báo tin tức hôm nay mới nhat reports that Israeli Weapons Industry is looking to open a factory in Vietnam to produce weapons for the Far East market. They could invest up to $100 million in the plant. The Vietnamese military has adopted a wide range of Israeli small arms including the Tavor, Negev LMG, Galil SAR rifle and Galil Sniper rifle.As part of this context, the bilateral defense relationship was in the headlines again with an Israeli defense delegation in Vietnam last week. A delegation from the International Defense Cooperation Directorate of the Israeli defense ministry (SIBAT), led by Director Mishel Ben Baruch, was in Hanoi for meetings with Vietnamese personnel and officials.According to Vietnam’s defense ministry, the meeting provided the opportunity for both sides to evaluate the current state of cooperation in areas like education and training as well as defense industry, as well as to expand future collaboration.Unsurprisingly, few specifics were released about exactly what the shape of that future bilateral defense collaboration would look like. The defense ministry said that in a reception held for the delegation, Vietnam’s Deputy Defense Minister Nguyen Chin Vinh had expressed his appreciation for the results of Vietnam-Israel defense cooperation and expressed hope that the visit would further enhance the bilateral relationship.Vietnam, Israel to expand defense cooperation (qdnd.vn)Defense Minister receives Israeli ambassadorHo Chi Minh City wants to cooperate with Israel in various fieldsDefense Minister receives outgoing Israeli AmbassadorAt the reception, General Vinh highly valued the Vietnam-Israel defense cooperation which has achieved positive results over the past time. He also hoped that the visit of the SIBAT delegation to Vietnam would enhance the bilateral relationship.Senior Lieutenant General Nguyen Chi Vinh (R) and Director Mishel Ben BaruchThe host also affirmed that Vietnam will create favorable conditions for the Israeli delegation to visit and look for cooperation opportunities in line with Vietnam’s laws.The two countries should also continue exchanging and improving practical cooperation in the fields of education and training, search and rescue, and defense industry, he added.For his part, Mr. Ben Baruch briefed General Vinh on the results of the earlier meeting between the Israeli delegation and the Department of External Relations under the Vietnam Ministry of National Defense. He affirmed that the Israeli side is willing to expand defense cooperation with Vietnam, especially in the previously-mentioned fields.Translated by Minh AnhIsrael’s top arms clients: India, Vietnam, AzerbaijanPrime Minister Benjamin Netanyahu and his wife, Sara, watch as Indian Prime Minister Narendra Modi flies a kite in Ahmedabad in January. (photo credit: REUTERS/AMIT DAVE)Arms sales do not ensure support in international forums, as the top three markets for Israeli military equipment – India, Vietnam and Azerbaijan – almost always vote against Israel in the United Nations.According to the Stockholm International Peace Research Institute’s updated data, India is by far Israel’s largest weapons market, having bought $715 million worth of weaponry in 2017, down slightly from the $767m. it bought in 2016. This represents a whopping 650% increase in arms sales to India over the last decade.Israel is India’s second largest source of arms, lagging far behind Russia, which sold New Delhi $1.9 billion’s worth, but significantly ahead of both France and the US.According to the database, Vietnam is Israel’s second largest customer, having purchased $142m. in arms in 2017, making Israel its second largest arms supplier, after Russia.Azerbaijan – a Muslim country on Iran’s border – is the third largest weapons market for Israel, having bought $137m. worth in 2017, a steep decline, however, from the $248m. it bought in 2016. Israel is Azerbaijan’s largest arms supplier.While India at times abstains on key Israel-related votes in the UN, Vietnam and Azerbaijan can be counted on always to vote against Jerusalem.The institute ranked Israel as the fifth largest arms supplier in the world, with $1.26b. of sales last year, following the US, Russia, France and Germany.The data place Israel in 18th place regarding the import of arms, having spent $528m. on arms last year, fully 97.5% of it imported from the US, and the rest coming from Germany. In the past decade Israel has only imported arms from the US, Germany, Italy and Canada.According to the SIPRI data, in 2017 Israel sold $11m. in arms – Dvora patrol boats – to Myanmar. Israel came under fire last year for arms sales to that regime, accused of carrying out ethnic cleansing. Jerusalem’s sales represented 6.5% of Myanmar’s arms expenditures in 2017, with China and Russia making up the bulk of sales to that country, and Ukraine and the Netherlands selling more to Myanmar than does Israel.Last year was the first year Israel sold arms to Myanmar since 2011.Among other interesting trends culled from the data:• For the second year in a row, Israel sold no military equipment to Turkey, a country that in 2009 bought some $320m. worth of Israeli weapons, making it far and away Israel’s top arms client that year.• The Philippines emerged as a major market for Israel for the first time in 2017, having spent $21m. on radar and antitank systems.• Weapons deals with two Asian countries, Singapore and South Korea, slipped precipitously last year, the SIPRI data said, with South Korea, which bought $52m. in military equipment in 2016, not making any purchases in 2017, and the amount sold to Singapore dropping from $43m. to $2m. last year.• Italy is the fourth largest purchaser of Israeli arms, and the biggest customer in Europe, having spent $87m. in 2017 for Israeli airborne early warning and control systems.• Israel sold $25m. worth of radar systems to Canada last year, the first time Israeli arms have been sold to Canada since 2009.• Cyprus spent $23m. on an offshore patrol vessel for its coast guard to protect the Cypriot Exclusive Economic Zone and the Aphrodite gas field. The only other time that country has ever bought military equipment from Israel was a million dollar deal in 2002.Vietnam seeks closer defense trade ties with IsraelTEL AVIV, Israel – In a rare public acknowledgment of growing defense trade with Israel, Vietnam President Tran Dai Quang said Israel "has become a big partner of Vietnam" and should work to deepen bilateral ties in research, development and technology transfer.Quang's remarks came at a reception held in Hanoi for Yitzhak Aharonovitch, chairman of Israel's state-owned IMI Systems, where the Vietnamese leader cited "consistently growing" cooperation, "especially in the areas of security and defense."According to an IMI statement released Monday, Aharonovitch, a former minister for public security, said the Israeli company he now chairs has been investing in Vietnam since 1999 and hoped that "mutual collaboration and high technology knowledge transfer" with Vietnam would continue to grow."Aharonovitch stressed that the advanced weapon systems developed and manufactured by IMI Systems correspond to the advanced technology used by the Vietnamese Army," the statement read.Although the press release did not identify specific IMI products that have been sold to Vietnam, sources said the list includes advanced tank rounds, artillery systems and the firm's Extra, a four-meter-long precision artillery rocket designed to carry a range of warheads up to distances of 150 kilometers.According to the IMI statement, Aharonovitch last visited Vietnam in 2014 in his role as Public Security minister. "President Quang praised the contribution of Aharonovitch in expending Vietnamese-Israeli cooperation during his tenure as Minister of Public Security and expressed the hope that Aharonovitch will continue to further promote bilateral relations, especially in training quality personnel in the field of technology."In March 2015, the two countries concluded a memorandum of understanding on defense cooperation that codified areas for expanded defense trade, technology transfer, and licensed production.The IMI Chairman's visit to Vietnam comes on the heels of Israeli Prime Minister Benjamin Netanyahu's week-long visit to Singapore and Australia; a trip that the Israeli leader defined as an "Asia pivot" aimed at strengthening regional ties among a spectrum of industries, including aerospace and defense.Deputy PM’s visit beefs up Vietnam-Israel cooperationWhy does Israel work with Vietnam in military? (Quora)

Short version: We turn over every stone, and keep turning before, during, and after an investment is made.Long version: I perform hedge fund due-diligence (DD) for family office and institutional investors so this topic is quite near and dear to me. I’m proud to have steered our clients away from several funds that turned out to either be fraudulent or blew up for operational reasons. We’re dealing with allocation sizes in the tens of millions so the stakes are obviously very high. I’ll try to be as detailed as possible but this will really only scratch the surface at best.There are several objectives to hedge fund DD (and it’s not all about making sure the manager isn't a Madoff.) It helps to recognize from the outset that each hedge fund is first and foremost a business, and for businesses to be successful they need to have a differentiated product, a repeatable process for creating that product, and as a potential client you need to evaluate your own need for the product. In other words, what is the manager's differentiating 'edge' (see Nate Anderson's answer to As a fund manager, what’s the best response to, "What is your edge?" when asked by a potential investor? I talk about the differentiated strategy approach and team experience. I’m not sure there’s a genuine structural edge in the investment business.), what is the process for exploiting that edge, and how does it fit into your portfolio?To answer these questions investors must gain a deeper understanding of all of the following: (a) the strategy, (b) the investment process, (c) the people involved in the fund, (d) the ‘business’ operations of the fund, and (e) the performance track-record.Initial ReviewTypically, the DD process starts with an initial document review to glean the basics and see if its worth taking the meeting. I generally start with the tearsheet, presentation, and recent investor letters. Every investor has their own limiting criteria, but depending on the investor some will pass right away due to factors such as:Size of the fund. Some investors want the sense of ‘safety’ from a large fund, while others prefer smaller funds due to their higher return potential. (My diligence is generally focused on smaller funds, which may have higher operational risk, so the research burden tends to be higher.)Undifferentiated strategy or an unfavorable strategy for the market environment.Lack of a track record. Many institutions and investors require 3 years of track-record or a ‘portable’ track record from a manager's previous firm in order to get comfortable with their historical ability to perform. Again, I have some investors who are comfortable being 'day-1' money which raises the due-diligence threshold.Poor relative or absolute historical performance.High volatility or large drawdowns.Poor quality of investor communication. The only thing that differentiates a 'black-box' from a transparent fund is communication. If the communication from managers is sparse or uninformative it is tough to get comfortable with a strategy. We generally like to see monthly performance updates with quarterly commentary. Anything more frequent may mean the manager is spending too much time writing, and anything less means we are in the dark for too long.Lack of credible third-party service providers (auditor, independent fund administrator, prime broker, legal counsel.) Third-party service providers are the checks and balances on a manager's operations. Investors do not get compensated for taking on unnecessary operational risks, so if we don't see auditors, administrators, and prime brokers in place we will pass immediately.MeetingIf the manager passes our initial document review we'll take a meeting. The first meeting(s) are usually the standard pitch, a walk-through of the presentation, and a high-level Q&A. Though we'll have an idea going in on what we want answered and what we'd like to discuss, we let the manager start with their pitch and always end up free-forming after a while. The idea is to get a sense of the manager, personality, and to probe on different areas of interest or concern and get a sense of whether it holds up.If the strategy, performance, fund structure, and people all pass the initial smell test and merit further interest, due-diligence begins in earnest. An initial document list is requested which generally includes:Marketing materials:Investor letters since inception. These give us a sense of the quality of communication, investment ideas, research, and insight into the manager’s personality and approach.Relevant PR such as interviews, press releases, and published articles.Due-diligence questionnaire aka the ‘DDQ’. This is a key document that asks 100+ detailed questions about the fund. The AIMA (Alternative Investment Management Association) version is the most common DDQ. We review the DDQ provided by the manager and compare it with the AIMA DDQ to see if the manager deleted any questions from the list. Usually, when a question is missing from a DDQ it's because it was irrelevant to the strategy, but sometimes a deleted question can be HIGHLY relevant and show what questions the manager doesn’t want to answer. (Here's a random completed DDQ off Google in case you’d like to get a sense of what that document looks like: Page on opcvm360.com)Research samples. Again these give us a sense of the depth and focus of the investment process.Legal:Private Placement Memorandum. This is the legal doc outlining key terms of the fund. This is generally where all the nuances on fees and fund structure are found. See How do you describe, calculate, and interpret management and incentive fees and net-of-fees returns to hedge funds? for more detail on nonsense to be aware of surrounding hedge fund fees.Subscription documents. We review to make sure everything is consistent with the PPM.Partnership agreements. These detail terms of the business structure and can also detail nuances of the fund structure.State certificate of organization/LP certificate/state registration doc, IRS W-9 tax ID form. These are mostly just confirmatory documents.Other:Audits since inception. The independent auditor’s report is of critical importance, as it will reconcile assets, portfolio balances, performance, and often provide insights on portfolio construction, liquidity of underlying assets, and back-office protocols.Independent prime brokerage report as of last completed audit. This allows us to see even more detail on the portfolio from the time of last audit and allows us to reconcile the audit with the actual portfolio. If anything doesn’t line up with the audit it means either we or the auditor are missing something.Reference list. They will all obviously be glowing references, but the choice of references can be very important. Who they leave out of the reference list is often more instructive than who is included. That being said, sometimes good information can be found through the references.Service provider contact information. We verify the relationship with each service provider, and perform due-diligence on the service providers to get an understanding of the terms and length of the relationship with the fund.Any external or internal risk reports. These give us a sense of how they measure risk, what risks they control for, and how they fall within those parameters.Regulatory registration documents such as form ADV for advisers. This is more confirmatory information but can also show critical pieces of information such as assets under management as of a particular date, key principals, number and type of clients, and compliance with the law.Once the document review is completed, you’ll likely have a better understanding (and many new questions) about key issues surrounding the 3 P’s: people, process & performance. The next step is to dig on areas of interest or concern to learn more on each of these three areas.PeopleOne of my favorite stories on manager due-diligence came from a well-known investor who passed on a hedge fund because of a raincoat:The investor wanted to get to know the manager better, so they agreed to go on a hike. Halfway up the mountain it began to downpour. Unfortunately, the manager hadn’t checked the forecast and spent the latter part of the hike completely drenched. The (dry) investor realized at that point that the manager was a little too focused on the adventure ahead of him and not at all focused on managing the predictable risks along the way. The investor passed due to concerns over risk management.We haven’t passed on any managers over rain gear, but I think the point is relevant. In poker, you must observe everything about a player; betting patterns, style of play, tolerance for risk, and personality. You piece together an understanding of the person from the data in order to get a sense of their tendencies. The same applies to due-diligence on people. Fortunately we have a lot more data to work with than at a poker table:Background checks. We use a service that looks for criminal, regulatory, and civil infractions, including Anti-Money-Laundering checks on all principals and key employees of a prospective firm.Regulatory checks. The Financial Industry Regulatory Authority (FINRA) has a very comprehensive database of brokers and investment adviser firms that shows whether individuals or firms have had any regulatory infractions, their registration status, whether they’ve had any arbitration awards issued against them, and the full employment record of registered individuals (among other things). It also ties into the SEC database which is often relevant for larger firms. All of this is obviously extremely valuable background information. One little trick we use is to match up the employment record of the principal with the bio in their marketing materials. Often they will leave firms out of their bio if they had a bad experience there, though they'll include it on their regulatory filings. It may bring up points that require further digging: BrokerCheck: Research Brokers & Investment AdvisersBack-channel reference checks. This is probably one of the hardest things to do effectively, particularly for industry outsiders, but this can be a source of absolutely critical information. This is the scuttlebutt; the “I’ll talk to my guy who worked in this manager’s Deutsche Bank division when he was a portfolio manager...” This approach is often how you get the ‘real’ story behind a manager.Regular ol’ reference checks. You have to cut through the glowing praise and ask the right questions to really get a sense of the truth, but these can be helpful.Direct interviews with the manager. This doesn’t have to be a cross examination but during the meetings there should be a component of confirmatory questions along with getting a sense of the manager’s personality, background, and approach.Google. (Never underestimate!) I was asked by a family office to diligence a manager and I googled the manager before anything. Past investors had posted on a forum that the manager lost 90%+ of their money by making risky bets then doubling down when the original bets didn’t work out.Skin in the GameAlso worth noting is that it's incredibly important to know that the manager has invested in their own fund, and that they are risking their assets alongside yours. Most investors want to know what percentage of the manager's liquid net worth is in the fund, and will often request documents to prove it.Operational and Investment ProcessNow that you understand more about the people you’re working with, you want to understand the structure and processes that constrain them.A hedge fund, like any other business, creates a product (a portfolio). In order to generate consistent portfolio performance you need to understand the sausage factory, including both the investment process AND the operational processes in place.I know what you’re thinking—operations are boring. The sexy stuff is how people come up with their brilliant investment ideas. Unfortunately, the operations and business side of the fund are not trivial matters; research has shown that over half of all hedge fund blow-ups occur due to operational issues that have nothing to do with the investment process. As unappealing as it is to try to figure out the nuances of how Net Asset Value is calculated and reconciled with the fund administrator, it’s even less appealing to lose a billion dollars because you didn’t take the time. (Yes, turning over every stone means turning over the ugly ones too.)I’ve seen institutional investors pass on funds for reasons which may not be immediately obvious problems to a new hedge fund investor. Below are some examples. If you can think through the issues or potential issues with each real-life scenario below then you are off to a good start:A small fund required a single signatory on cash transfers.A fund had legal entities for their marketing, deal sourcing, and investment divisions of the firm.A large, well-known fund has used a big-4 firm as their auditor since inception, and worked with several offices of the firm over the course of their relationship.The same fund in #3 managed their fund administration internally.A fund was down 3% one month.A fund had rehypothecation agreements in place with their Prime Broker, a major, well-respected Wall St. bank.I imagine some of the above might not even sound like English. So what does it mean and why were these all problems for the prospective investors?Single signatory. Like any other business, embezzlement can be a problem for hedge funds. Requiring a single signatory to move cash, particularly for a small fund, means that a founder/key employee can potentially loot the place without limits. It’s not unheard of for a business owner to get served divorce papers then decide it's time for an early retirement in a tropical, non-extradition friendly country. On a less major scale, an employee may embezzle smaller amounts systematically over time. Hedge funds generally have much higher asset liquidity than traditional businesses, and therefore cash stewardship is of utmost importance. For these reasons, institutions usually require double signatories on cash transfers, often with one signatory being a credible, independent fund administrator.Multiple legal entities. Separate legal entities are put in place to limit liability (and potentially transparency) between entities. Whenever a manager puts legal shields in place between different operational aspects of a fund the investor should have a very clear understanding of why that is the case. In this case the reasons didn’t pass the smell test, and were likely in place to obscure important information for investors.Using several offices of the same accountant. Accountants understand the concept of multiple legal entities all too well. For example, each office of PWC may have its own separate legal entity which protects the greater organization and other offices from shared liability. In other words, working with 3 different offices of the same firm can be like working with 3 completely different firms. Another fact about accountants: If they find a problem with a fund (or a company) they will often resign rather than report their suspicions. In this particular example, 3 offices of the same accounting firm resigned over the course of the life of the fund. Unfortunately, most investors just thought: "Well, the manager has used a credible firm since inception, therefore it’s all kosher." Wrong.In-sourced administration. Approximately 90% of all hedge fund frauds would be eliminated through use of a credible outside fund administrator to manage valuation, NAV reporting, subscriptions/redemptions, and the back-office functions of a hedge fund. Madoff (again) in-sourced his administration. He couldn’t have reasonably pulled off his fraud had he used a credible outside administrator.Fund down 3% in a month. This by itself isn’t a problem. Some funds have high volatility and +/- 5% or more in a month isn’t unusual. The problem was that this particular fund’s investment strategy was expected to generate a slow, consistent half percent a month. A drawdown in one month of 3% in the context of that strategy was a red flag. The next month the fund was down 9% and subsequently lost another 20% before shutting down.Rehypothe-what?? Rehypothecation is when the fund lends their securities to their prime broker. The broker can then use the securities as collateral to lend against, and will generally pay the fund a small fee in return, which helps lower the fund’s brokerage expenses. Here’s bottom line: When Lehman Brothers went bankrupt, this small distinction determined who 'owned' the assets. It was the difference between blow-up or solvency for many funds. (Literally billions were lost or saved over this nuanced operational detail.)In addition to operational processes, the investor must understand the investment processes in order to get a sense of how the fund’s portfolio is constructed. How does the manager source ideas, and what does their own research consist of? What kind of risks does the fund take? Risks such as currency, security, sector, market, interest rate, volatility, and countless other risks can be a part of the portfolio construction process. How does the manager make sure they are adequately compensated for those risks? How do these risks fit into the investor’s broader portfolio? Professional portfolio managers must account for all of these factors with the funds they invest.Performance.On every disclaimer on every document you will read from a hedge fund it will say: "Past performance is not indicative of future results." I'm generally not a fan of legalese but this bit should be taken as gospel. Historical returns are in the past, and without understanding them in the context of the strategy, the risks taken, and the changing nature of the strategy in the market then those returns are meaningless. Statistics lie. At the very least they can mislead: Did you know that the Vatican City has 5.9 Popes per square mile? True fact.Lets go through another quick example. If a manager tells you “we returned 100% last year.” Are you:(a) Excited(b) Interested(c) Skeptical/unsure(d) Overwhelmed by feelings of inferiority over your own lousy returnsIf the answer is anything other than lots of ‘c’ with a little bit of ‘b’ then you need to learn more about what performance means. (If your answer is ‘d’ I suggest yoga.)Performance needs to be understood in context. What risks did you take to make 100%? What is the volatility an investor can expect on those kinds of returns? (No matter how great your returns are, you only need to lose 100% once to wipe it all out.) Statistics like Sharpe ratios, maximum drawdown, correlation, and volatility can only really be helpful in the context of the market and the strategy that contributed to that performance.I once met with a manager who returned 142% in 2009 and 55% in 2010. Those were eye-popping returns, and they had all the right service providers and statistical ratios to ‘prove’ how credible and great they were.The manager told me that their whole strategy was to analyze momentum price signals, because “when you focus on one thing all day you get pretty good at it.” They were a complete black box as far as their model and their investment process, but the manager shared one aspect of the model: “When the market goes up we are able to capture those returns, but as soon as the market starts to drop, the model shuts down in order to mitigate any losses.” Classic baloney. (Explanation: Unless you know whether the market will continue to go down or up you can't determine when to turn the model on or off. He was basically implying that they could perfectly predict the direction of future price action in the market.)I passed on the fund, and it literally blew up the next month. (To be fair, I didn’t realize it would blow up so soon, though I did know that it would inevitably blow up with those returns coupled with no credible explanation of how they produced them or why they would persist.) The moral is that it's hard to find an edge and generate consistent returns, and historical performance (whether good or bad) has to be understood in full context.OverallThis overview really just scratches the surface but hopefully the framework and actionable tips are helpful. Many institutions view their due-diligence process as proprietary, but personally I’d rather see all investors have a deeper understanding of the process. It’s bad for the industry when charlatans run around with impunity, and quality diligence helps lift the entire profession. Most hedge fund managers are good people (honestly), but even among good people there can be a lot of average performers and undifferentiated strategies. A good due-diligence process can be both informative and collaborative-- in addition to learning about the managers our DD process often leads to operational improvements among funds we work with.Take your time, and don’t be afraid to ask even seemingly stupid or awkward questions. The best questions are often a little bit awkward. Always keep in mind that the next stone you turn over could be the difference between gaining or losing everything. If a manager seems reticent to provide information or answer your questions its generally a sign of what the relationship will look like going forward. Investments in hedge funds are ultimately partnerships and the good managers will understand and appreciate your need to learn before investing. Good luck!